The Economy of the Maritimes in the 19th and Early 20th Centuries

[ Logging On Nashwaak Lands ]

Logging On Nashwaak Lands, Unknown,

The economic history of the Maritime provinces during the second half of the 19th and early 20th Centuries is rather complex. From the 1840s to the 1890s, the Maritimes underwent an intense period of industrialization and economic transformation characterized by a cycle of economic upswings and downturns. This was followed by a low period of industrial decline and economic contraction during the first three decades of the 20th Century. Throughout this period, Acadian communities were always at a disadvantage in relation to the Anglo-Protestant majority that surrounded them.

In the middle of the 19th Century, financiers in Great Britain and British North America (i.e. the colonies that would become Canada in 1867) invested massively in the Maritimes. The region was in a period of transition. During the first half of the 19th Century, Great Britain had encouraged imports from the colonies by setting tariffs on foreign imports, a policy that had consolidated Halifax and St. John in their position as hubs for the transportation and warehousing industry. Great Britain’s switch to free trade prompted Maritime financial magnates to invest in the development of industries that would transform the natural resources that heretofore had been transported directly to Europe.

Agriculture also became more specialized. Despite the general lack of good, inexpensive agricultural land, rural areas turned toward specific products and monocultures. For example, it was during the 1870s that intensive potato farming emerged on Prince Edward Island, as did apple growing in Nova Scotia’s Annapolis Valley.

During the same period, the transformation of the transportation industry, which stopped using large wooden ships and began using boats made of iron and steel, had damaging effects on forestry throughout the Maritimes. Only regions that could specialize production in fine wood, or that found specific markets for their products, managed to survive in this sector. Only New Brunswick would manage to conserve its large-scale wood industry, primarily because its wood was transformed for use in construction of the province’s houses and railways.

The fishing industry changed as well. From the 15th Century to the end of the 20th Century, fish was the primary export of Canada’s Atlantic coast. Changes in this industry therefore had an enormous impact on the economy of the entire region. At the beginning of the 1870s, large companies that had held quasi-monopolies over the fishing industry, like Charles Robin & Sons, founded in the 18th Century, went bankrupt. Fishermen who previously had been employed by these companies found themselves without access to a boat and without no prospect of other employment. Catches diversified as well. Historically, bottom fish like cod had constituted the largest part of the catch, but now seafood and especially lobster took on greater and greater importance. Along with the diversification of catches came the emergence of a canning industry, which facilitated exports.

The only sector that really did well during the 1870s was coal, which was mined in fantastic quantities in Cape Breton and was necessary for the production of steel, itself essential to industrialization.

The 1870s were as difficult as they were because the transformation of the economy was a slow process. Things turned for the better with the election of the federal government of John A. Macdonald in 1878. Until his resignation in 1896, Macdonald would apply his National Policy, an economic plan aimed at the industrial development of the whole of Canada. The plan consisted of a series of specific measures, including customs tariffs of 30% on foreign textiles, iron, steel, coal and oil. The federal government also financed the building of railways to facilitate the transportation of manufactured goods from outlying areas (like the Maritimes) to the large economic centres in Quebec and Ontario, and directly subsidized manufacturing industries like Nova Scotia’s steel industry.

The result was dazzling, unprecedented economic and industrial growth. With around 20% of the total population of the Dominion of Canada, the Maritimes of the 1890s boasted eight of Canada’s 23 cotton-spinning factories, two of its seven rope and cordage factories, three of its five sugar refineries and the only two steel plants in the country. The region became urbanized as the population migrated into industrial centres like St. John, Moncton, Sydney and Halifax.

Unfortunately, this economic growth was totally artificial. The end of Macdonald’s National Policy was a complete disaster for the Maritimes. With the end of customs tariffs there was no longer a market for their products, while in the absence of subsidies transportation costs exploded, and the region went through a period of deindustrialization. The end of investments led to factory closures, the relocation of financial institutions to Montreal and Toronto, and a massive exodus of the population to the United States and Ontario. Even with a brief upswing during the First World War, the economic slowdown didn’t stop, and things went from bad to worse through to the end of the 1930s. It goes without saying that the Great Depression of the 1930s hit the Maritime provinces particularly hard.

The economic slowdown affected all classes of society, as it did all ethnic groups, but in different ways and to different degrees. From the post-Deportation period to the turn of the 19th Century, the Acadian economy was totally dependent on the geographical location of its business enterprises. Prior to the Deportation, most Acadians had been farmers, but from the 19th Century onwards the Acadian economy was multiple, with each sector being defined by the dominant role of one or more large companies.

This meant that Acadians were particularly vulnerable to economic highs and lows. Since Acadians tended to be employees of large companies, as opposed to being owner-operators, when a downturn affected a sector of the economy (and therefore its large companies) its impact was amplified in Acadian regions specialized in that sector. Furthermore, unlike the pre-Deportation period, agriculture for most Acadians in Nova Scotia was little more than a subsistence activity. Each household had its garden, a few small fields for hay, a few cattle for milk and ploughing, chickens for eggs, pigs for the butcher and sheep for wool.

Up until 1890, forestry had been important in the Acadian regions of Nova Scotia, not only because people heated with wood, but because wood was still used in the construction of ships. Prior to the transition to steel vessels, naval construction was a vital sector in the Acadian regions of Nova Scotia, particularly St. Mary’s Bay. With the decline of this industry, shipyards closed or were downsized to build only small and mid-sized fishing boats. This was in fact the economic activity par excellence of the Acadians of the Maritimes. Till the end of the 19th Century, Acadians had primarily been employed by large companies, but the collapse of the latter led them to acquire their own boats and to form cooperatives to finance fishing and processing activities. A number of those cooperatives founded in the 1920s and 1930s are still in operation today, in one form or another.

Further Reading

Alexander, David. “Economic Growth in the Atlantic Region, 1880-1940,” in Acadiensis Reader, vol. 2, Atlantic Canada After Confederation, 2nd ed., P. A. Buckner and David Frank, dirs. Fredericton: Acadiensis Press, 1988: 134-163.

Forbes, E. R. and D. A. Muise, dirs. The Atlantic Provinces in Confederation. Toronto: University Toronto Press, 1997, especially the first two parts.

Ross, Sally and J. Alphonse Deveau. Les Acadiens de la Nouvelle-╔cosse, hier et aujourd’hui. Halifax: Nimbus Press, 2001.

Oral History or Interview